Which of the following statements is true?
A)Valuing inventory under LIFO may produce different results depending on whether a perpetual or periodic inventory system is used.
B)Valuing inventory under the weighted average cost method always produces the same results using either a perpetual or periodic inventory system.
C)Valuing inventory under FIFO may produce different results depending on whether a perpetual or periodic inventory system is used.
D)Using the specific identification method will produce different results depending on whether perpetual or periodic inventory system is used.

Question

Quizplus · Accepted Answer

Valuing inventory under LIFO (last in, first out) assumes that the most recently purchased items are sold first, which can produce different results depending on whether a perpetual (updating inventory after each transaction) or periodic (updating inventory at the end of a period) inventory system is used. In a perpetual system, each sale is recorded at the most recent cost, whereas in a periodic system, the cost of goods sold is calculated based on the cost of inventory at the end of the period, which may not accurately reflect the cost of goods sold throughout the period. The other statements are not necessarily true.

Which of the Following Statements Is True